Chris Skinner's blog

Shaping the future of finance

HSBC: no longer an investment bank?

Chris Skinner Author Avatar
by

HSBC sent out a press release yesterday announcing that they are
re-naming the "Corporate, Investment Banking and Markets Division".  It
will now be called "Global Banking and Markets".  Global Banking and
Markets comprises five main businesses: Global Banking, Global Markets,
Global Asset Management, Global Research and Principal Investments.

The
press release quotes CEO, Global Banking and Markets Stuart Gulliver,
as saying: "We launched our emerging markets-led and financing-focused
wholesale banking strategy in the fourth quarter of 2006 and completed
implementation over the course of 2007. Changing our name to Global
Banking and Markets does not signal a change in strategy. Rather, our
new name marks the end of the implementation of the change to our
strategy, which has been well-received by clients, staff and
shareholders. When we introduced our new strategy more than a year ago
we promised to be clearer about who we are and what we do. Our new name
is straightforward and direct and aligns with how the business is
managed."

Very good.

However, it has raised lots of questions.

For example, the bank has gone through some considerable change at the top of the Division, and this reorganisation follows a similar major reorganisation only two years ago, which also meant considerable change at the top back then.  Strikes me a bit of the Petronius Arbiters (see end note).

For
example,the five businesses: Global Banking, Global Markets, Global
Asset Management, Global Research and Principal Investments.  Note that
not one of them is called "investment banking". 

Are HSBC giving up any ambition to be an investment bank? 

After
all, they are following in the footsteps of Royal Bank of Scotland, who
also call their investment banking operations "Global Banking and
Markets".  The fact that both banks no longer refer to investment
banking means that some of us ask whether it is more indicative of
their weakness in the investment banking markets, rather than their
strength.  Certainly this is the view of Eric Knight, the activist shareholder who has claimed that this division has underperformed for the last few years.

Finally,
does it mean that HSBC no longer offer M&A, structured investment
vehicles and all that good investment banking stuff?  Hmmm, they've
certainly tried to be big in this arena, but with what success?

The
result is that most commentators are reporting that HSBC is no longer
an investment bank and, with this renaming, it would appear that HSBC
is strategically admitting it is no longer an investment bank ...

...
but then a lot of folks think they've never really been an investment
bank anyway.  They're a global bank, and so it kinda makes sense to
call the division "Global Banking and Markets" doesn't it?

Meanwhile, it did intrigue me that the "Global Markets" homepage on the HSBCnet website is nicknamed "Treasury", http://www.hsbcnet.com/hsbc/treasury, whilst the "Global Banking" homepage is "Investment", http://www.hsbcnet.com/hsbc/investment, with investment banking a subsid of this group. 

Maybe not that much has changed. 

 

 

Petronius Arbiter was a Roman satirist, who is attributed with a wonderful quotation, supposedly written in 210 B.C.:

"We
trained hard . . . but it seemed that every time we were beginning to
form up into teams we would be reorganized. I was to learn later in
life that we tend to meet any new situation by reorganizing; and a
wonderful method it can be for creating the illusion of progress while
producing confusion, inefficiency, and demoralization."

Some say however that, as this quote only started appearing in the 1970's, maybe it wasn't an orginal one after all.

UncategorizedCategories
Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

Intelligent Money - Chris Skinner Keynote @ Pay 360 conference 2024

What is the future?

Learn more

Learn more about Chris

About Chris Skinner

The Past, Present And Future Of Banking, Finance And Technology

Fintech expert Chris Skinner: countries need digital transformation to remain competitive

Join me on Linkedin

Follow Me on X!

Hire Chris Skinner for dinners, workshops and more

Learn directly from from one of the most influential people in technology, gain insights from the world's most innovative companies, and build a global network.

Chris’s latest book

Chris Skinner’s ‘Digital For Good’ Book Launch Event – CFTE

Top 50 Global Thought Leaders and Influencers on FinTech 2023

Chris Skinner
Commentator, CEO of The Finanser and best-selling author at The Finanser

Thinkers360 Thought Leader

Contact Me

Global Awards

Lifetime Achievement Award

Global 100 - 2024 Winner

Chris Skinner - Financial Markets Advisor of the Year - The Finanser - UK 2023

Best Financial Markets Advisor of the Year 2023

30 Best Regtech Blogs and Websites 2023

Kids creating the future bank | TEDxAthens

Captain Cake and the Candy Crew

Captain Cake Winner of a Golden Mom’s Choice Award

TWO-TIME WINNER OF A MOM’S CHOICE GOLD AWARD!

Alex at the Financial Services

Gaping Void's Hugh MacLeod worked with the Finanser